HAMISH RUTHERFORD

Publicly listed companies are taking almost a week longer to settle their bills than privately owned rivals, new research shows, with payment cycles continuing to lengthen across the country.

According to Dun Bradstreet, an international debt collection agency, private companies took an average of 44.6 days to pay bills in the final three months of 2011. Public companies, which have shares traded on stock exchanges, took, on average, 51 days, an increase of 5.8 days on a year ago

Dun Bradstreet said that while listed firms have historically taken longer than their private counterparts to pay their accounts, the latest spike brings payment terms meant listed companies were paying at the slowest rate in more than two-and-a-half years.

”This is indicative of an inherent mismanagement of cash flow that can be potentially hazardous to their financial health, given that firms on the stock exchange contribute significantly to the New Zealand economy,” said Dun Bradstreet New Zealand manager John Scott.

The figures also showed companies with more than 500 staff were the slowest payers, averaging nearly 49 days, while companies with 20 staff or less took, on average, 43 days.

Once again, government organisations were tardy payers, despite assurances from Prime Minister John Key shortly after he was elected that they would lead by example.

Public administration – which includes most government departments – averaged around 46 days, above the New Zealand average of 44.6 days.

The slowest paying sectors were the electricity and gas sector, at an average of 52.8 days, followed by the communications industry at 52.2 days, Forestry was the fastest paying industry, at 39.3 days.

Companies and organisations in the South Island, at 43.5 days, paid faster than the North Island, at 44.9 days. Christchurch, at 45.1 days, was fast than Wellington (45.4 days) and Auckland (46.3 days).

For all of 2011, Kiwi companies took an average of 45.2 days, almost a day slower than 2010, but faster than 2008 or 2009.

– © Fairfax NZ News

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